db x-trackers, Deutsche Bank’s exchange-traded fund platform, is launching seven daily two times leveraged ETFs across Europe.
Three of the ETFs track daily leveraged short indices and four track daily leveraged long indices from recognised index providers.
The three daily leveraged short ETFs track indices that provide two times daily inverse exposure to the Dax, Euro Stoxx 50 and S&P 500.
The four daily leveraged long ETFs track indices that provide two times daily long exposure to the Dax, Euro Stoxx 50, FTSE 100 and S&P 500.
The launch of the daily leveraged ETFs complements the range of 16 daily short equity ETFs offered by db x-trackers.
db x-trackers ETFs on daily leveraged long and short indices are designed for financially sophisticated institutional investors who want to use them for short-term investment strategies.
The aim of each daily leveraged long index is to provide two times the daily performance of the corresponding long index (with dividends reinvested) minus a prorated proportion of interest based on the overnight money market rate. The prorated interest portion reflects the cost of borrowing the underlying index components to provide leverage.
The aim of each daily leveraged short index is to provide two times the inverse daily performance of the corresponding long index (with dividends reinvested) plus a prorated portion of interest based on three times the overnight money market rate. The prorated interest portion reflects the interest earned on (i) the amount invested and (ii) the notional cash held as a result of short selling of the borrowed index constituents to achieve the leveraged short exposure.
